WASHINGTON (MarketWatch) — Rare is the government official whose name becomes public after a leak of sensitive information. Rarer still is a VIP resigning after being fingered for a leak.
Jeffrey Lacker, the now departed president of the Richmond Federal Reserve, turned out to be an exception. Lacker resigned Tuesday after acknowledging his role in a 2012 report by a Wall Street advisory firm that revealed the U.S. central bank’s strategy to shore up the economy.
Such information is extremely sensitive, and the Fed takes great pains to prevent its disclosure lest it undermine the bank’s credibility. Investors with access to inside information get an unfair advantage and could make money at the expense of others.
The resignation of Lacker, who had been planning to retire soon, is arguably the biggest episode of misconduct at the normally sedate central bank in decades. A former chairman of the New York Fed stepped down in 2009, but his departure involved the disclosure of personal stock trades and was unrelated to monetary-policy matters.
In the nation’s capital, where leaks to journalists are common, the story is the same. Seldom are leakers discovered and forced to resign. Reporters generally celebrate and protect leakers, and until recently Washington has usually looked the other way.
That started to change in the Obama White House, though. The administration of President Barack Obama launched prosecutions in nine cases involving leakers or whistleblowers — more than all previous presidents combined.
Some of those cases involve the dissemination of classified intelligence related to national security, including to WikiLeaks. Others were more low-grade affairs that probably would have gone unnoticed in prior administrations.
The White House under President Donald Trump has vowed to go after leakers amid a spate of stories damaging to the administration in its first few months in office. It remains to be seen if the White House will follow through.
Perhaps the most famous leak-related case in Washington in the past two decades involved Scooter Libby, a senior aide to then–Vice President Dick Cheney who resigned in 2005 after being charged with perjury during the investigation of a leak of the name of a CIA operative.
Libby himself was not the source of the original leak. The original leaker, a prominent Republican foreign-policy expert, was not charged.